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Chapter 11: Agriculture and Rural Development

Chapter 11 of the negating framework refers to the adoption of the acquis governing The Common Agricultural Policy (CAP) of the EU. This policy area is of the most important in the EU, both in terms of the number of regulations in this area, and in terms of the share of the agricultural budget in the total budget of the European Union. In fact, the next Multi Annual Financial Framework (MFF) has dedicated 47% or EUR 373.18 billion to the heading 2 "Sustainable growth: natural resources”, which refers to the EU Common Agricultural Policy and its programs.

The main objective of the CAP is to provide a stable supply of agricultural products to the market at affordable prices, which also entails a guaranteed adequate income for farmers.

Common Agriculture Policy has been reformed last year aiming to make this policy area greener and fairer, Serbia will therefore have to face some additional conditions in order to successfully close the chapter, than for example Croatia had to during its negotiations.

The acquis in this field is divided in several subchapters. However, the backbone of EU agricultural policy is split into two pillars. The first pillar consists of direct payments and market intervention, and the second one refers to the rural development policy. Direct payments make for the largest part of the budget. They are derogated under certain conditions (environmental protection and human health, food safety, animal welfare, keeping the land in good condition) in form of subsidies to the farmers, regardless in which type of production they are involved. These incentives guarantee and provide a steady income to the farmers regardless of market volatility. The subsidies and incentives are financed by the European Agricultural Guarantee Fund. The EU intervention in agricultural market entails: acquisition of products, withdrawal from the market, support to the production of certain products, the quota system (milk and sugar until 2014) and support to producer organizations. It is extremely important to underline that in this area (market intervention), as well as in the field of direct payments, Member States may not have their own national measures.

The second pillar ‘rural development’ includes measures that are necessary for development activities in rural areas, which contribute to strengthening the competitiveness of agriculture and forestry. These policies also aim at improving biodiversity in rural areas, quality of life in these areas, as well as measures to encourage diversification of the rural economy. Funds for these measures are provided by the European Fund for Rural Development.

As one of the most important policies for economic growth in the EU, the CAP has also a very important acquis that needs to be adopted by the candidate countries. In case of Serbia, at the moment considerable efforts are still needed in order for the legislation to be fully harmonized. Consequently, the negotiations on agriculture and rural development will be extremely demanding and will also require horizontal approach to the adoption of new laws as the topics covered by this chapter closely relate to other chapters (Chapter 12: Food Safety, Chapter 20: Environment, Chapter 30: External Relations etc.). Nonetheless, for Serbia which is a country with important agricultural tradition, the result of the harmonization with the EU legislation in the field of agriculture and rural development will guarantee an access to the EU market with over 500 million consumers, important arrangements of production, as well as processing and marketing of agricultural products in the common market and with third countries (inclusion in important trade agreements). But most importantly, EU membership will enable Serbian farmers to use funds for agriculture and rural development, improve product quality, and thereby significantly increase their competitiveness in the EU market.

Contact person:
Ksenija Simović, CEP Researcher - ksenija.simovic@cep.org.rs

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Open Society Foundations

Regional Research Promotion Programme